Why does my Federal tax that I owe go up when I enter my home property taxes and mortgage interest?

[VolvoGirl]

By increasing your deductions it will decease your income and you may not be getting as many credits as before.   Also after you reduce your income to zero there is no more refund to get back but you still may owe for other things like self employment tax or the 10% early withdrawal penalty from 401k or IRA accounts.

[DawnC0]

First, are you sure that it is not your ''refund'' that is increasing?  If your tax is going up when you enter deductions, it is probably because you have triggered the Alternative Minimum Tax.   You are not required to enter any deductions so if they are activating the AMT you can choose to not report them.  See more below.  Also, some credits are based on your income, so you may be losing more on a credit than you are gaining on the deduction, which will result in your tax due going up or refund going down.  

Although the Tax Cuts and Jobs Act (TCJA) that was signed into law in December of 2017 substantially reduced the number of 2018 taxpayers subjected to the AMT, it didn’t completely eliminate it.

Common reasons for getting hit with the AMT include:

• Exercising or selling ISOs (incentive stock options);
• Deducting interest from a large second mortgage;
• Claiming business depreciation.

If you are subject to the AMT, you don't have to pay it separately; we've already accounted for it in your refund or taxes owed amount.

Related Information:

• How much is the AMT exemption?
• What is the Alternative Minimum Tax (AMT)?

[bob-kuhn1]

Just realized I said "Federal" tax. It is my Maryland state tax that increases. Sorry!

[DawnC0]

You enter mortgage interest into the Federal return.  And if you see the state refund meter change when you are entering things in federal, just ignore it.  The state number will not be accurate until you go through it.